In order to induce blue corporation to build a new manufacturig facility in Los angeles, Ca, the city donates land ( fair market value of $ 250,000) and cash of $ 100,000 to he corporation. within several months of the donation, prakeet corporation spends $ 350,000 ( which includes the $ 50,000 received from Los Angeles) on the construction of a new plant located on the doanted land.
How much gain or loss does prakeet recognize as a result of these tranaction?
Solution
land value = $250000
cash = $100000
total spent by prakeet corporation = $350000
amount received from Los Andeles = $50000
Total gain = total amount received - spent
Total received = $250000+$100000+$50000 - $350000 (spent)
total gain = $50000
.
In order to induce blue corporation to build a new manufacturig facili.docx
1. In order to induce blue corporation to build a new manufacturig facility in Los angeles, Ca, the
city donates land ( fair market value of $ 250,000) and cash of $ 100,000 to he corporation.
within several months of the donation, prakeet corporation spends $ 350,000 ( which includes the
$ 50,000 received from Los Angeles) on the construction of a new plant located on the doanted
land.
How much gain or loss does prakeet recognize as a result of these tranaction?
Solution
land value = $250000
cash = $100000
total spent by prakeet corporation = $350000
amount received from Los Andeles = $50000
Total gain = total amount received - spent
Total received = $250000+$100000+$50000 - $350000 (spent)
total gain = $50000
